sebi:WTM/RKA/EFD/176/2016
Facts / Headnote
Proceedings disposed of; no fresh penalty imposed, noting noticee had already undergone the one-year prohibition imposed by the earlier order dated July 15, 2015.
Provisions invoked
- s. 11
- s. 12(1)
Regulations relied on
Parties
- Vijay Kumar Gaba
Holding
The noticee, by providing investment advisory services to a client for a fee pursuant to an arrangement, acted as an unregistered portfolio manager in contravention of section 12(1) of the SEBI Act and regulation 3 of the PMS Regulations. However, since the noticee had already undergone the one-year prohibition imposed by the earlier order and there was no record of continued activity post-2007, the proceedings were disposed of with that prohibition deemed commensurate with the breach.
Full text
In respect of Mr. Vijay Kumar Gaba Page 2 of 17 his clients which tantamount to the services offered by a "portfolio manager", as defined in Regulation 2(cb) of the PMS Regulations.
In respect of Mr. Vijay Kumar Gaba Page 3 of 17 4) The directions issued against the noticee are neither preventive, remedial nor curative but penal. Not even a prima facie case was made out to warrant the issuance of the ex- parte interim order. 5) The power to issue directions under section 11 and 11B is a drastic power having serious civil consequences and ramifications on the repute and livelihood of those against whom it is directed. Such power is not available for routine and retrospective application and cannot used for penal action. 6) SEBI has to justify the need for invocation of the said power clearly after about 8 years from the alleged cause of action and in the backdrop of chronology, multiple proceedings between the parties and especially when Mr. Madam Mohan Sharma did not complain about purported non-compliance of PMS Regulations by the noticee. 7) Nothing has been brought on record to justify the delayed action and that too when the noticee had already stopped advisory services when he joined DSP Merill Lynch on 26.06.2007. 8) Without prejudice to the above and in the alternative, it was submitted that in the
In respect of Mr. Vijay Kumar Gaba Page 4 of 17 and other considerations so that they can devise a holistic approach to their financial planning and investment avenues. 13) None of his clients entrusted their existing portfolio of shares to manage nor entrusted their funds to the noticee to manage. He did not manage any portfolio of securities and/or funds of anyone. No one had authorized the noticee, in their KYC documents to brokers to place buy/sell orders of shares on their behalf or for any other stock market - pre-trade, trade or post-trade activity. No one had any grievance against his services which were advisory in nature and with express and implied cautions, market risks and disclaimers. 14) The noticee never advised his clients about intra-day trading, trading in futures and options or speculative trading of any kind based on technical charts. He firmly believed in medium to long term investments in equity shares of ‘good to great’ companies and emphasized on wealth protection. 15) The noticee is not a SEBI registered sub-broker. Since August 2012, he is an AMFI registered mutual fund distributor but did not undertake such activity till date. 16) The noticee had joined DSP Merill Lynch Limited as Research Analyst on June 28, 2007 and worked there till May 18, 2012. Consequently, he could not advise anyone in his personal capacity after he joined this company in view of strict compliance norms and code of conduct prohibiting employees to interact with outsiders in
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Source: SecMarx — sebi:WTM/RKA/EFD/176/2016. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.